2005 April Comments on: Brunk, Caldeira, and Lewis-Beck, "Capitalism, Socialism, and Democracy: An Empirical Inquiry"
I.
Introduction A. The authors here point out that one can find a variety of arguments in the literature on the relationship between a country's economic system and the country's political system. In particular, one can advance four competing, incompatible propositions about the nature of this relationsip: 1. The Classical Liberal Model: a) Claude (1976): The "larger the proportion of the population involved in the private distribution of goods and services, the greater the tendency to define citizen roles in terms of legal guarantees for the free exchange of men and ideas congruent with existing economic market conditions." Friedman (1962): Concentrated governmental power threatens economic freedom, for the free market demands a dispersed organizational form. (1) To prevent governmental intervention in the marketplace, political institutions must be designed to check the centralization of power.
B.
b)
c)
In a capitalist democracy, public officials find it difficult to silence a critic of the regime, for he can organize and support himself in the private sector, beyond the reach of the heavy hand of the government. (1) Thus the opportunities of the marketplace help lend substance to the right of free speech.
d)
According to Friedman (1962: 109): "History suggests only that capitalism is a necessary condition for political freedom. Clearly it is not a sufficient condition." (1) (2) If you want political freedom, you must have capitalism. But even if you have capitalism, you won't necessarily have political freedom.
e)
Empirical test: (1) The greater the size of the public sector, the less democracy there will be. (a) Recall that I think we should make a distinction between (i) (ii) government regulation of the economy, and the size of the public sector (which can just be a taxsupported welfare program).
2.
The Marxist Model:
a)
Early followers of Marx assumed that socialism was compatible with political democracy. (1) What they most wanted next was "economic democracy"; (a) (2) that is, control of the economy by the state.
Only if the economy is controlled by the state could meaningful political democracy be achieved.
b)
Empirical test: (1) The greater the size of the public sector, the more democracy there will be.
3.
The Apolitical Model: a) Some scholars have argued that capitalism and democracy have evolved largely independently of each other. test: Empirical (1) The greater the size of the public sector, there will be no consistent effect on how much democracy there is.
b)
4.
The Mixed-Economy Model: a) Perhaps there is a non-linear relationship between economic institutions and political institutions. (1) For example, under high levels of political direction of the economy, there will be relatively low levels of democracy. But under very low levels of political direction of the economy, there will be relatively low levels of democracy as well. (a) Perhaps for democracy to succeed, government must be able to acheive goals such as the preservation of law and order and the delivery of basic goods and services. (i) The fulfilment of these elementary functions requires a modest amount of governmental intervention and investment. If the state is incapable of exercsing this minimal level of effectiveness, democratic institutions will quickly come under fire.
(2)
(ii)
(3)
It is at middle levels of public control of the economy that we find the greatest amount of democracy.
5.
The Impact of Economic Development: a) b) Lots of evidence showing the importance of the level of economic development. Empirical test:
(1)
The more economic development there is, the more democracy there will be.
II.
Empirical Test A. B. C. The paper then proceeded to test these five hypotheses. Gathered relevant data on 70 countries in the 1960's. Results: 1. Economic development has a positive impact on the level of democracy a) 2. This is precisely what Lipset and many others have found.
The extent of public control of the economy has a curvilinear impact on the level of democracy: a) b) c) at low levels of public control, there are low levels of democracy. at middle levels of public control, there is a maximal amount of democracy. at high levels of public control, there are low levels of democracy.
3.
From these data from the 1960's, the optimum governmental share of the gross domestic product runs somewhere between 20% and 30% of the gross domestic product. The impact of level of economic development and the impact of the extent of public control of the economy have roughly equal amounts of impact on the level of democracy.
4.
III.
Other Possible Influences? A. Influences identified by Weber: 1. 2. 3. Protestantism The amount of domestic violence The era in which the democracy was founded. a) B. Measured as the year of independent statehood.
There is little empirical support for the role of these additional variables: 1. They don't add much to the explanation.